Inflation, Monetary Policy and Structural Adjustment in Zambia

Per-Åke Andersson () and Boo Sjöö ()
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Per-Åke Andersson: Department of Economics Göteborg University, Postal: SE-411 80 Göteborg, Sweden, ,, http://www.gu.se/english/
Boo Sjöö: University of Skövde, Department of Economic and Political Sciences, Postal: Box 408, 541 28 Skövde, Sweden, http://www.his.se/

Economia Internazionale / International Economics, 2002, vol. 55, issue 4, 425-449

Abstract: This paper analyses the monetary policy and its impact on the rate of inflation during the economic structural adjustment programs in Zambia during 1987 to 1993. To avoid the Lucas critique, the focus is on a sample period, 1987 to 1993, which is relevant for analysing inflation and monetary policy during adjustment programs. The sample does not include other types of monetary regimes than the ones relevant for analysing the adjustment process. The supply of money and the price level are decomposed into permanent and transitory components. The results suggest that the price level in Zambia was driven by the supply of money, and that the authorities were able to reduce inflation by restricting the money supply process during the adjustment programs.

Keywords: Inflation; money supply; structural adjustment; cointegration (search for similar items in EconPapers)
JEL-codes: C32 E50 E65 (search for similar items in EconPapers)
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ecoint:0172

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